health innovators: funding healthcare innovation - presentation by darshana zaveri
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CHV PresentationApril 16, 2014
Healthcare Investing that Impacts People’s Lives
Investing that Changes People’s Lives
5 investments; All Active2 derivative investmentsActively Investing
2
Investing in Healthcare since 2000
CHVI
Y2000
Y2008
Y2013
10 investments; 7 exits1 ActiveNotable Exits: Novazyme (Genzyme), Biotrove (Life Technologies), Hansen Medical (NASD: HNSN), GI Dynamics (AUS: GID)
10 investments; 3 exits7 ActiveNotable Exits: Biocius (Agilent), Vortex Medical (AngioDynamics)
CHVII
CHVIII
Investing that Changes People’s Lives 3
Who We Are
Joshua Phillips Managing Partner
Darshana Zaveri Partner
Kevin McCafferttyCo-Founder, Special Partner
Robert VigodaCo-Founder, Special Partner
Dianne LetzelterCFO & VP of Investor Relations
Investing that Changes People’s Lives 4
CHV Portfolio
12.7
1.6
5.8
2.1Kaleidoscope Medical
Investing that Changes People’s Lives 5
Healthcare Investing: Risks
Longer Clinical and Development Cycles
Uncertain Regulatory Environment– No clear directive on Diagnostics – Device approvals taking longer
Uncertain Reimbursement Environment– Harder to get paid for products and procedures– Focus on outcomes– Uncertainty in diagnostics reimbursement
Overall Dampening Effect on Venture Investing– Poor Returns, particularly IRR– Fewer healthcare funds raised
CHVIII
Investing that Changes People’s Lives 6
Healthcare Investing: Opportunities
16% of GDP and Growing
Non Cyclical business
Changing Demographics– People living longer; Want to be active and stay at home as long as possible– New healthcare needs created
No overall change in Medtech companies appetite for acquisition – Product pipeline weak post 2020– Long term outlook favorable
CHVIII
Investing that Changes People’s Lives 7
Taking Advantage of the Opportunities
Healthcare rapidly adopting value-based purchasing
Industry focus is on improving outcomes and lowering cost
Manifests in several ways– Reimbursement– Pricing– Approvals
All our portfolio companies demonstrate a clear value proposition aligned with this new world
It’s not just amazing technology!
Investing that Changes People’s Lives 8
Our Strategy: Focus on Opportunity Selection
Focus on Large Opportunities within Healthcare– Billion $ markets– Big clinical needs: Women’s Health, Cancer, Cardiology, Audiology
Invest in Innovative Technology Solutions; Limit Scientific Risk– High probability of value creation
Capital efficient – Responsible investing– Entrepreneur friendly
Earlier stage than traditional VC– Ability to add significant non-financial value– Fill a real financing gap
Meaningful impact on health
Investing that Changes People’s Lives 9
Case Study: Vortex Medical
Challenged prevalent assumptions on investment needs– Virtual Company; 1 employee– Outsourced all non-core functions including Development, Regulatory and
Manufacturing– Commission based sales model
Challenged prevalent assumptions on regulatory, pricing and reimbursement– Clear, well thought out regulatory strategy resulted in non-clinical, 510K
clearance – Clear, well thought out economic benefit analysis resulted in payment for
every single procedure– Product commercialized in US first; One of the highest priced single use
devices on market
Capital Efficient Model– $3.5M total investment and <4 years from idea to exit– Acquired by Angiodynamics Inc. (NASD: ANGO)
CHVII
Transformed Standard of Care for PE; Superb Returns for Investors